The present invention relates to a real-time trading method. The present invention also relates to an associated apparatus for implementing the method. More specifically, the present invention relates to a method and apparatus for trading a commodity such as a currency in real time over a computer network such as the Internet.
In contrast to the stock market, where exchanges supervise and maintain an orderly and generally fair process of trading for all investors, the trading of currencies has no central exchange. Instead, a plethora of financial institutions trade currencies on behalf of their clients. There is only a modicum of governmental monitoring of the currency trading activities of these institutions.
In part because of the absence of substantial governmental regulation, currency trading is subject to well known abuse by the institutions acting as currency brokers. These institutions frequently misrepresent the spread between the highest bids (offers to buys) and the lowest offers (offers to sell). Where a client desires to consummate a currency exchange, the currency broker not only makes money on the revealed commission on the reported spread but also pockets the hidden spread, i.e., the difference between the actual spread and the spread reported to the client by the broker.